I was recently at a party, and when I mentioned that I write business plans for a living, several people asked me “do companies still need those?” I was then inspired to write this article.
1. Raise Money. Business plans express your idea in a financial and analytic way to show prospective investors how their money will be spent and how it will provide a return on their investment. It is hard to raise money without a sound business plan even with a great team.
2. Roadmap to success. Poor planning often causes the death of many great ideas. A good business plan will keep a company on target and ensure that money is being spent efficiently on the opportunities that have the highest return on investment (ROI).
3. Make good decisions. Once you have clearly decided what your marketing goals, strategies, targets and tactics are, it should be easy to identify those things that do not fit. For example, if you have identified the best marketing vehicles to reach your customer, then it is easy to say “no” to those salespeople offering you marketing opportunities that do not fit your plan. Steve Jobs once said, “I’m as proud of what we don’t do as I am of what we do.”
4. Recruit a great team. In order to get those sought after employees, you need to show them a plan to success. Even recruiting advisory board members becomes easier when you have laid your vision in an organized and convincing way.
5. Ensure everyone is on the same page. Miscommunication between team members, advisors, investors and partners is not an uncommon problem. Having a business plan ensures everyone is on the same page and understands the path and goal of the company.
Don’t believe me? Trust the Statistics!
A recent survey by Palo Alto Software of about 400 small business owners found that those who had put together a plan and tracked their progress regularly had higher hopes for the year ahead. According to the survey: 79% of companies with a business plan say they are better off financially as compared with how they felt a year ago, while only a third of small businesses without a business plan can say the same thing. ~ 75% of established companies with a business plan in place expect to grow more than 10% this year, compared with 17% found for established firms without a plan.
If you have questions on your business plan, email firstname.lastname@example.org